The Licensing Angle on Business Purchases
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Recent Appeal Decisions Afford Helpful Pointers for Applicants, Particularly those Seeking Licence "Transfers"
SOME important points of principle emerge from recent appeal decisions. In last week's issue we reported the Appeal Tribunal's decisions on four appeals, but space considerations precluded examination of the underlying reasons, which we now outline.
The appeal of Mr. B. 3. S. Wasey against the South-Eastern Licensing Authority's refusal of an A licence raises interesting factors concerning the sale of haulage businesses. Conditional upon Mr. Wasey, who is a B-licensee, being granted an A licence in respect of the undertaking, a Mr. Povey entered into an agreement with Mr. Wasey for the sale of his (Mr. Povey's) business. Accordingly, Mr. Wasey applied for an A licence to expire not later than the date upon which Mr. Povey's licence terminated.
Did Section 11(3) (b) Apply?
The application involved the replacement of a vehicle, and, in view of this fact, the Appeal Tribunal was doubtful whether the application was one to 'which, on the face of it, Section 11(3) (h) of the 1933 Act referred. It was, however, unnecessary for this point to be decided, because the Tribunal concluded that whether Section 11(3) (b) applied or not, the Boston Haulage appeal decision governed the case.
In the Boston Haulage decision (which affected the proposal of an Alicensee to purchase the business of another A-licence holder) it was laid down that the Licensing Authority must be satisfied :—
(1) That at the time the agreement to sell was made, the vendor had a business as a public carrier ; (2) that the customers for whom he was then working were ready and willing to transfer their patronage to, the purchaser; (3) that this work should be done under an A licence ; and (4) that, in order to carry out the service, it was reasonably necessary for the purchaser to take over the vehicles belonging to the business which he was buying.
Commenting on the Wasey case, the Licensing Authority expressed the view that, save in exceptional circumstances, it was not desirable that a small operator should have his fleet split up between A and B licences. Such an arrangement, he pointed out, did not make for good organization or convenient working.
In the Boston Haulage appeal, the :Tribunal held that, in ihe absence of
special circumstances, an A-licensee who buys a public carrier's business should be allowed to do the extra work accruing to him with A-licence vehicles.
The logical conclusion to draw from this ruling is that, apart from special circumstances, a person who has agreed to buy an A-licensee's businta% should be authorized to use the vehicles under a similar licence, so that he can gain the full benefit of the goodwill. The fact that the purchaser holds a B licence is, in the Tribunal's opinion, not a special circumstance that would justify the refusal of an A licence to continue an existing business.
In the Boston Haulage decision, the Tribunal deliberately ' refrained from suggesting that proof should be given that all the vendor's customers are prepared to employ the purchaser. The Tribunal's intention was that evidence must be led tceshow that a reasonable number of customers is prepared to assign traffic to the purchaser.
This question has, of course, an important bearing upon thea0umber of vehicles which it is reasonably necessary for the buyer to use in addition to his existing fleet.
Mr. Povey was a specialist in the transport of cattle and other livestock, and horses, The Licensing Authority made the assumption that the demand for such haulage still existed and that anyone who carried on Mr. Povey's business on the previous lines would obtain the custom. The Tribunal holds that this assumption was not justified, particularly as Mr. Wasey proposed to conduct Mr. Povey's business from a different centre from. that on which it was hitherto based.
Buying a Specialized Business.
An important point affecting the purchase of a specialized business, such as this, is the buyer's experience of the class of work involved. Mr. Wasey, except in so far as helad been carrying for hire or reward under his B licence, had no experience of cattle transport. The Tribunal, therefore, suggested that many of the persons who had employed Mr. Povey might, in the future, engage some other expert.
As there was no evidence to justify the finding that Mr. Povey's customers would transfer their work, or any part of it, to Mr. Wasey, the Tribunal dismissed the appeal.
The appeal of Gamman and Dicker, Ltd., against the refusal of additional tonnage by the South-Eastern Licensing Authority is an outstanding example of a case spoiled by lack of evidence. The main issue was whether or not Gamman and Dicker, Ltd., had proved the necessity of additional vehicles to carry traffic for a certain concern, which, it appears, had for many years used the railways without complaint.
Although the hearingwas on two occasions adjourned for a representative of the client to give evidence, he did not, in fact, do so. The only evidence before the Licensing Authority on the point in question was that contained in a somewhat ambiguous letter from the customer, and that given on behalf of Gamman and Dicker, Ltd.
In the circumstances, the Tribunal had no alternative but to support the Licensing Authority.
Operators who are proposing to replace horses by motors will be interested in the case of Reed versus Bristol Co-operative Society, Ltd. The facts of the case are that for many years the Bristol Society has carried out furniture removals.
Short-distance removals were carried• out by horsed vans, the vehicles belonging to the Society, and the horses being hired from Messrs. Short, of Bristol. For longer-distance work, a motor was hired from a Mr. Ashman.
Replacing Horses by Motors.
The Society's object was to replace horses by motors. The issue was complicated, however, by the fact that Messrs. Short had already been authorized to supersede horses by motors, and it was held that, if the Society's application were allowed, there would be a dual grant.
In the Tribunal's opinion, the Licensing Authority, when paying regard to the provisions of Section 6(2) (e) , has to take into account not the horses or the vans by themselves. but the vehicles as horse-drawn units. It was immaterial whether the Society hired horses or used its own animals, and, if there were any danger of a dual grant, the disability was inherent in the Act.
The Gamman and Dicker appeal and the case of the Southern Railway Co. and Wilkinson both stress the fact that the hiring-allowance provisions of the Act are now virtually dead. Applicants who seek hiring allowances ostensibly for the temporary replacement of vehicles undergoing repair receive little sympathy, because, as was emphasized in the two appeals referred to, Article 15 of the Goods Vehicles (Licences and Prohibitions) Regulations, 1936, provides expeditious machinery in such circumstances.
a result of inquiries made by the Tribunal, it appears that an application under this Article for a short-term licence for the replacement of a vehicle out of commission can be obtained in substantially less than 36 hours.